A man gets a simple interest of Rs.500 on a certain principal at the rate of 5% p.a in two years. Find the compound interest the man will get on twice the principal in two years at the same rate.

Question

A man gets a simple interest of Rs.500 on a certain principal at the rate of 5% p.a in two years. Find the compound interest the man will get on twice the principal in two years at the same rate.

Answer 1

A. Rs.500
B. Rs.250
C. Rs.5012.50
D. Rs.5062.50
E. None of these.

Explanation:

Let the principal be Rs.P

S.I at 5% p.a in 8 years on Rs.P = Rs.500
(P)(8)(5)/100 = 500
P = 1250
C.I on Rs.2P i.e., Rs.2500 at 5% p.a in two years
=2500{ [1 + 5/100]² – 1} = 2500{ 21² – 20² /20²}
= 2500/400(441 – 400)
= 25/4(41) = 1025/4 = Rs.256.25

Correct Answer: None of these. ✔

Last Updated: February 07, 2020